The global shipping system is facing the biggest crisis in 65 years. Currently, more than 350 cargo ships are stuck in ports, causing a "major traffic jam at sea." The shipping supply chain is strained, and port infrastructure is old. Some shipping companies have decided to take

The recurrence of epidemics and the recovery of demand have caused important challenges for global shipping and ports.

The global shipping system is facing the biggest crisis in 65 years . Currently, more than 350 cargo ships are stuck in the port, causing a "maritime traffic jam". The shipping supply chain is in a tight situation, and the port infrastructure is old. Some shipping companies have decided to take the initiative to invest. port.

The shipping price from China and Southeast Asia to the east coast of North America exceeded US$20,000 per TEU for the first time, and the Baltic Dry Bulk Index also hit the highest level since mid-2010.

01 The global shipping system is facing the biggest crisis in 65 years

In addition to extreme weather that will cause shipping delays, the new crown epidemic that started last year has made the global shipping system face the biggest crisis in 65 years . The surge in terminal demand and outdated port infrastructure have strained the shipping supply chain, and the global shortage of containers and port congestion continues to worsen.

Real-time data from logistics company Kuehne+Nagel shows that there are currently 353 cargo ships stuck in ports around the world, more than double the number at the beginning of this year. Among them, the major ports in the United States, the Port of Los Angeles and the Port of Long Beach, currently have 22 cargo ships waiting outside the ports, and it is estimated that it will still take 12 days to carry out unloading operations.

Although there have been port congestions during peak seasons in previous years, the main cause of global shipping congestion in the past year has been the COVID-19 epidemic. Various countries have implemented varying degrees of border controls in response to the epidemic, and many factories have been forced to suspend operations, jeopardizing the smoothness of the entire shipping supply chain, causing freight rates on shipping routes in China, the United States and Europe to soar.

In fact, every part of the shipping supply chain is at a tipping point, For shippers, freight forwarders and agents, even small changes in demand can have a huge impact downstream. In addition, in terms of updating infrastructure, ports need to improve automated operations and decarbonized logistics, and the new generation of cargo ships is getting larger and larger.

Specifically, the largest cargo ship at present can carry 20,000 20-foot containers at a time. The length of all the containers after being unloaded is equal to the distance from Paris, France to Amsterdam by taking the highway, but such a large ship requires a deeper port. and larger cranes.

In this regard, John Manners-Bell, CEO of shipping consulting company Transport Intelligence, pointed out:

Since last year, the epidemic has exposed that many ports are facing infrastructure upgrade problems. The entire port infrastructure system has been overwhelmed last year and is in urgent need of Invest in renewal and construction.

Soren Toft, CEO of Mediterranean Shipping Company (MSC), the world's second largest container shipping group, also said:

In fact, the problems at the port already existed before the epidemic, but the situation of old facilities and capacity restrictions was only affected during the epidemic. was highlighted.

At present, some shipping companies have decided to take the initiative and take action to invest in ports first so that their cargo ships can get priority processing rights. Recently, HHLA, the operator of Hamburg Terminal in Germany, said that it is negotiating with Cosco Shipping Ports for a minority stake, which will make the shipping group a partner in planning and investing in terminal infrastructure.

02 Shipping prices hit new highs

CCTV Finance reported that on August 10, the global container freight index showed that shipping prices from China and Southeast Asia to the east coast of North America exceeded US$20,000 per TEU for the first time. On August 2, that number was still $16,000. The

report quoted expert opinions as saying that in the past month, many major global shipping companies, including Maersk , Mediterranean Sea, Hapag-Lloyd , etc., have successively raised or increased many shipping companies in the name of peak season surcharges and destination port congestion charges. item surcharge. This is also the key to the recent sharp increase in shipping prices.

In addition, the Ministry of Transport also stated not long ago that with the recurrence of overseas epidemics, severe congestion has continued to occur at ports in the United States, Europe and other places since the fourth quarter of 2020, resulting in chaos and reduced efficiency in the international logistics supply chain, resulting in large ship schedules. Area delays seriously affected operational efficiency. This year, tight international shipping capacity and rising freight rates have become global problems.

At the same time, the Baltic Dry Bulk Index rose 93 points, or about 3%, to 3,503 points on August 12, the highest level since mid-2010.

The Baltic Dry Index is a benchmark for global bulk freight prices and an economic indicator for the shipping industry. The index has risen 10% over the past month.

Reuters quoted Rebecca Galanopoulos Jones, research director of ship brokerage company Alibra Shipping, as saying that on the one hand, demand is strong, and on the other hand, it is affected by factors such as weather disturbances and port congestion.

Jones said that physical demand and the bill market have been strong, benefiting from demand from the Pacific region, but also benefiting from the fundamental factors of strong commodity demand since the beginning of 2021. Meanwhile, port congestion and Pacific weather concerns also weighed on the market.

It is worth noting that the Meishan Port Area of ​​Ningbo Zhoushan Port has now adopted closed control.

CCTV News reported that at the Ningbo press conference on the prevention and control of the new coronavirus epidemic held on the afternoon of August 11, Ningbo City reported the situation of a positive nucleic acid test sample. Currently, the Meishan Port area of ​​Zhoushan Port in Ningbo, where Yu, a person who tested positive for nucleic acid tests, works, has adopted closed control. Relevant departments immediately launched an epidemiological investigation on Yu and identified 245 close contacts.

The market is risky, so investment needs to be cautious. This article does not constitute investment advice.

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